The U.S. Dollar is trading in tight ranges but mostly tilted downward against most currency pairs as volatility fades following easing of U.S.-China trade talk tensions.
Overview
While this week has been characterized by markets being on the edge as tariffs and their negative effects were on the forefront, statements from U.S. President Donald Trump calmed investors. He explained that the current duties levied on China are unsustainable and that he wants to meet with China’s President Xi Jinping in the next few weeks, reportedly in South Korea. This development has helped in lowering the Cboe Volatility Index, retreating from an April high. Meanwhile, the Buck has been facing its biggest 5-day loss since late July.
As the U.S. government shutdown continues, any updates on that front will certainly impact markets. We still have no eyes on official numbers for fundamentals until those responsible get back to produce them. We may get a glimpse of the economic situation with Purchasing Managers Index figures which will come from S&P Global gauges.
What to Watch This Week…
- Compliance Webinar – October 23rd @ 4pm EST – Save your seat
- Monex USA Online is always open
EUR ⇑
The Euro is mostly flat after rising throughout the week by over 1.0% based on improvement of the political trouble in France. The French Prime Minister was able to survive rounds of no-confidence votes. As the EU’s second largest economy gets its act together, expect Euro to start being boosted or negatively hit by data points. Earlier, Consumer Price Index for September climbed as expected and now the annual average stands at 2.4%. This may prevent the European Central Bank from exercising any monetary easing.
MXN ⇑
The Mexican Peso is also flat at the moment as markets breathe easier with the idea that the U.S. and China want to fix their relationship and avoid higher costs to commercial trade. While data has painted a resilient picture for the Mexican economy, the Mexican Peso has jumped and sank in the last four weeks but is now back to where it was trading a month ago. With LATAM having idiosyncratic stories, MXN could gain from being a more stable staple of Emerging-Market value. Next week indicators will focus on inflation.
